During financial hardships, a home loan EMI moratorium can provide much-needed breathing space. But what exactly does this mean for borrowers? At Today Finserv Consulting India, we break down this crucial financial relief measure to help you make informed decisions.
Understanding Home Loan EMI Moratorium
What is an EMI Moratorium?
An EMI moratorium is a temporary pause on your home loan repayments approved by lenders. During this period:
- You don’t need to pay EMIs
- Interest continues to accrue
- Loan tenure extends accordingly
Key Features of Moratorium
✔ Temporary relief (typically 3-6 months)
✔ Not automatic – requires lender approval
✔ Interest keeps accumulating during pause
✔ Available for both principal and interest components
When Should You Consider a Moratorium?
Ideal Situations for Opting Moratorium
- Job loss or salary reduction
- Medical emergencies
- Natural disasters affecting income
- Business downturns (for self-employed)
- Other genuine financial hardships
How Does a Moratorium Affect Your Loan?
Impact on Your Home Loan
| Aspect | With Moratorium | Without Moratorium |
|---|---|---|
| EMI Payments | Paused | Continue as normal |
| Interest | Continues accruing | Normal calculation |
| Loan Tenure | Extends | Remains unchanged |
| Total Interest | Increases | As per original terms |
| Credit Score | Unaffected if approved | Normal reporting |
5 Crucial FAQs About EMI Moratorium
1. Is moratorium the same as loan waiver?
No. A moratorium is temporary relief, while waiver permanently cancels part of your debt.
2. How does interest work during moratorium?
Interest continues accumulating and gets added to your principal (interest capitalization).
3. Will moratorium affect my credit score?
Not if properly approved by lender. Unauthorized non-payment will damage credit score.
4. Can I prepay during moratorium?
Yes, most lenders allow prepayments which can reduce your interest burden.
5. How to apply for moratorium?
Contact your lender with:
- Written application
- Supporting documents
- Proof of financial hardship
Alternatives to Moratorium
Before opting for moratorium, consider:
- EMI restructuring (lower EMIs for longer tenure)
- Partial payments (pay interest component only)
- Loan refinancing (switch to lower interest rate)
Expert Advice from Today Finserv
We recommend moratorium only as a last resort due to:
- Significant increase in total interest
- Longer debt burden
- Potential impact on future loan eligibility
Facing financial difficulties? Consult our experts for personalized solutions!
